Nortel Creditor Preps Rescue PlanNortel Creditor Preps Rescue Plan

The likelihood of a creditor-led bid for control of bankrupt vendor Nortel Networks Ltd. increased during the weekend as various media reports suggested MatlinPatterson Global Advisers, a venture capital firm that specializes in "distressed assets," is actively seeking partners for a recapitalization of the Canadian giant.

The prospect of a bid for the whole of Nortel by creditors disgruntled at the current asset sale process first emerged last week. (See Nortel: Think Big, Nortel Creditors Cry Foul, and Nortel: It's All Up for Sale.)

Now, according to this Reuters report, MatlinPatterson is holding talks with other creditors in an effort to build a consortium of backers that could make a bid for Nortel before July 21, the deadline set for the auction of Nortel's CDMA and LTE (Long Term Evolution) access assets. (See NSN Picks at Nortel's Mobile Bones , How NSN Is Funding Its Nortel Bid, and Will Others Bid for Nortel's Wireless Assets? )

The pace of developments surrounding Nortel's current financial predicament has accelerated in the past few weeks. Here's a snapshot of the recent coverage from Light Reading and Unstrung: